Postgraduate Course: Mergers and Acquisitions (CMSE11438)
Course Outline
| School | Business School |
College | College of Arts, Humanities and Social Sciences |
| Credit level (Normal year taken) | SCQF Level 11 (Postgraduate) |
Availability | Not available to visiting students |
| SCQF Credits | 15 |
ECTS Credits | 7.5 |
| Summary | This course is suitable for students with postgraduate-level backgrounds in corporate finance and financial markets and provides students with the necessary skills to understand the strategic potential and limitations of mergers and acquisitions, their value creation potential, as well as the role of markets and institutions within the same framework. The course is designed to provide students with the necessary grounding in theory, as well as applied and organisational skills, to demonstrate that they will be successful in related career paths |
| Course description |
Academic Description
The course aims to deliver students, at a rigorous level, the several and important issues on mergers and acquisitions (M&As). In particular, the course aims to develop students' ability to critically understand and evaluate issues such as:
a) M&A activity, M&A waves, and role of the business cycle in the economy (or other major/external economies), and also the stock market development, in causing M&A activities and merger waves more generally.
b) Regulatory and strategic considerations, takeover tactics, and takeover defences.
c) Motives for M&As.
d) Target firm and foreign target firm valuation.
e) Issues developed through information economics that contribute on the negotiation and re-negotiation stage of M&As.
f) Anti-trust issues and the regulatory framework of M&As.
g) Empirical tests on the performance of merging firms at both the announcement- and the post-merger or integration period.
h) Cross-border (cross-industry) acquisitions and their main differences with domestic (focused) ones, (h) and game theoretical approaches on M&As.
The course relies on in-depth issues in corporate finance, such as capital structure, and covers the most recent developments from theoretical and empirical perspectives.
Outline Content:
The course will cover the following over ten two-hour sessions:
1. Introduction and overview of M&As Merger waves and the 5-stage model.
2. Acquisition strategies and alternative perspectives Motives for M&As.
3. Target firm valuation.
4. Foreign target firm valuation.
5. Valuation of synergies.
6. M&A computer simulation.
7. Structuring acquisitions & negotiations Paying for M&As.
8. Anti-trust issues Scheme of Arrangement vs. Offers, Target or Acquirer Termination Fee Provisions.
9. Investment banker perspectives.
10. Value creation from M&As Methods and evidence.
Student Learning Experience
Students will have to read the core texts that will support the learning outcomes of each topic/lecture, and also most of the additional references/readings that will accompany each topic. The weekly lectures will explore particular aspects of the course and the additional readings will attempt to help students put material in context, which will not substitute the core reading.
During lectures students will be asked to be active, completing exercises and discussing issues with their fellow students. In any case, the nature of the material means that in most cases there is not a single acceptable answer. The important aspect is students to be able to argue on a case and present compelling evidence to back their argument.
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Course Delivery Information
| Not being delivered |
Learning Outcomes
On completion of this course, the student will be able to:
- Summarise at an advanced and rigorous fashion the theoretical foundations of mergers and acquisitions (M&As).
- Discuss in a critical fashion the valuation principles and practices of M&As and rationalise success potential.
- Show advanced skills in valuing target firms and estimating the potential synergies arising from M&As.
- Contrast at an advanced and rigorous fashion the various empirical methodologies that aim to capture value creation from M&As.
- Show ability to negotiate the various terms of M&As and show knowledge around re-negotiation options based on risk-management tools.
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Reading List
Required:
-Sudarsanam, S. 2010. Creating Value from Mergers and Acquisitions: The Challenges, Prentice Hall - Pearson.
-Arzac, R.E., 2008. Valuation for Mergers, Buyouts and Restructuring, Wiley. (Important for topics 3 to 6).
Recommended:
-Bruner, F.R., 2004. Applied Mergers and Acquisitions, Wiley.
-Gaughan, P.A., 2010. Mergers, Acquisitions, and Corporate Restructurings, Wiley.
-DePamphilis, D., 2013. Mergers, Acquisitions, and Other Restructuring Activities, Academic Press.
-Tirole, J., 2006. The Theory of Corporate Finance, Princeton U. Press.
Additional readings (academic papers) will be suggested in the course of the lectures.
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Additional Information
| Graduate Attributes and Skills |
Knowledge and understanding:
-A critical understanding of the historical patterns, building blocks, motives, valuation models, negotiation tactics, and other important concepts of mergers and acquisitions (M&As).
Practice: Applied knowledge, skills and understanding:
-Build a strategic business plan that assesses the value and feasibility of M&As to reshape the modern corporation.
-Build on the most up-to-dated valuation techniques that help in evaluating firms and synergies in the context of M&As.
-Develop and in-depth knowledge of the sensitivities across inputs in the valuation models of M&As.
Communication skills:
-Communicate and present the findings and propositions from the group project (discussed later) to the wider audience from the course.
Autonomy, accountability and working with others:
-Learn to conduct research on specific industries and business models to assess the implication of M&As by drawing from numerous sources.
-Work and collaborate in a team during a research-based group project.
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| Keywords | Not entered |
Contacts
| Course organiser | Dr Leonidas Barbopoulos
Tel:
Email: Leonidas.Barbopoulos@ed.ac.uk |
Course secretary | Miss Yvonne Stewart
Tel: (0131 6)51 5333
Email: Yvonne.Stewart@ed.ac.uk |
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